German do-it-yourself chain Praktiker AG is withdrawing from Turkey and closing all of its nine stores in the country after failing to sell them.
The company announced today that it had filed an application for managed insolvency proceedings with an Istanbul court earlier that day.
“We want to return our domestic and international business operations to their former earnings strength. In this process, we cannot afford a persistent loss-maker like Turkey. In this process, we made intensive efforts to sell our Turkish subsidiary but could not reach an agreement that was economically acceptable for us,” Praktiker’s chief executive, Armin Burger, said in the company’s public statement. “That is why we now have to take this route to end this loss-making commitment in the interest of securing the continued existence of the group as a whole.”
Burger said Turkey was an exceptional case and the company would be able to improve profitability in all other countries in which it runs stores by adjusting structures and processes and by further curbing costs.
In the framework of the insolvency delay proceedings, the store portfolio is to be divested wholly or in part to a third party according to a restructuring plan presented to the court, and the inventory is to be sold off. If the court approves this application, the management of Praktiker’s Turkish subsidiary will implement the plan under state supervision, Hurriyet Daily reports.